New law aims to keep Mainers in their homes

Maine has been more fortunate than many other states. Home foreclosures have not escalated at the rate experienced elsewhere in the country. Nonetheless, foreclosures continue to increase at a modest rate here in Maine. Each foreclosure has agonizing consequences for everyone involved. With this in mind, the Legislature and Gov. John Baldacci took responsible action during the recently concluded legislative session to establish new procedures and create new services to assist homeowners who find themselves facing default or foreclosure.

The Department of Professional and Financial Regulation worked closely with the Insurance and Financial Services Committee and the full Legislature as LD 1418 was developed, enacted and signed into law. Sponsored by Rep. Sharon Treat of Hallowell, this important law will institute foreclosure mediation programs in all courts within the next six months. The law also provides a centralized location for consumers to obtain comprehensive home foreclosure information and resources, including access to housing counseling services. As a result, more homeowners will quickly receive the resources needed to address their mortgage problems and remain in their homes.

Specifically, a toll-free home foreclosure prevention hotline is now operational. By calling 1-888-664-2569 consumers facing possible foreclosure will reach Bureau of Consumer Credit Protection staff during work hours (8:00 a.m. – 5:00 p.m.). Consumers can leave a message after hours that will result in a return phone call the next business day.

The bureau also has developed a letter and informational packet to be mailed to consumers who have fallen behind in their mortgage payments. The packet includes a list of currently approved Housing and Urban Development counselors and details about the plan to make court-supervised mediation available in all counties through the Maine court system by January.

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Additionally, the bureau has drafted a single-page legal document for consumers to use to respond to a foreclosure action filed against them. The form also permits consumers to request mediation. The draft document, which is subject to review and approval by the Supreme Judicial Court, must be provided to consumers by lenders when the lenders serve the consumers with foreclosure papers.

More information about home foreclosure, including resources to assist consumers, has been added to the bureau’s Web site, www.Credit.Maine.gov. Homeowners struggling to make mortgage payments are encouraged to visit this Web site.

This new law won’t resolve the foreclosure problem; no law can. But thanks to the initiative and leadership of Gov. Baldacci and the Legislature — especially Rep. Treat and the other members of the Insurance and Financial Services Committee, including Senate Chair Peter Bowman — Maine homeowners will have access to more services and a better process to help them remain in their homes.

Anne L. Head is commissioner of the Department of Professional and Financial Regulation. William N. Lund is superintendent of the Bureau of Consumer Credit Protection.